2.5. Sources of Data for the Mathematical
Model
59
Fig. 2.6 Typical monthly data for runoff, evaporation, and irrigation. (From Texas
Water Development Board [1971].)
This constraint is designed to limit the long-term flow of funds from the
national treasury into water resource development. It represents the costs
less the revenues and taxes stimulated by the project over its entire economic life.
In this book we assume that the government is willing to fund the construction by providing one lump sum at the beginning (t = 0) in the
amount of Go. In any subsequent year t the present value of the funds
available
is
C t =
+ Zt-i - /w/(l + r)«
(2.18)
where % t -i is the revenue generated in year (t — 1), t t -i the investment in
year (i — 1), and r the interest rate. The model allows for different interest
rates to apply to positive and negative debt levels. M t in expression (2.18)
is then equal to C t or some fraction thereof. If the national government
decides that funding be on an annual or some other basis, M t can be easily
modified to conform.